Below is the financial analysis based on the Inditex report:
Income Statement
Unit: Million EUR
| Item | 9M2025 | 9M2024 | YoY | % of Total Rev (9M25) |
| Net Sales | 28,171 | 27,422 | +2.7% | 100.0% |
| Cost of Sales | (11,361) | (11,132) | +2.1% | 40.3% |
| Gross Profit | 16,811 | 16,291 | +3.2% | 59.7% |
| OPEX | (8,479) | (8,276) | +2.4% | 30.1% |
| Other Operating Income/Loss | (29) | (48) | -39.6% | 0.1% |
| EBITDA | 8,303 | 7,967 | +4.2% | 29.5% |
| Depreciation & Amortization | (2,359) | (2,294) | +2.8% | 8.4% |
| Operating Income (EBIT) | 5,943 | 5,673 | +4.8% | 21.1% |
| Profit Before Tax (PBT) | 5,964 | 5,754 | +3.6% | 21.2% |
| Net Income | 4,622 | 4,449 | +3.9% | 16.4% |
Note: Sales growth in local currencies was 6.2%.
Cash Flow & FCF Analysis
Unit: Million EUR
| Item | 9M2025 | 9M2024 | YoY |
| EBITDA | 8,303 | 7,967 | +4.2% |
| Working Capital Change | (1,253) | (342) | +266.4% |
| Capital Expenditure (Capex) | (1,269) | (1,276) | -0.5% |
| Free Cash Flow (FCF) | 1,165 | 1,909 | -39.0% |
Financial Highlights
- Profitability: Gross margin increased to 59.7% (+27bps), driven by strong execution and product desirability.
- Operating Leverage: OPEX grew by 2.4%, below the 6.2% constant currency sales growth.
- Liquidity: The net cash position reached 11.3 billion EUR, reflecting a very healthy balance sheet.
- Logistics Expansion: The company is executing a special logistics expansion plan (900 million EUR annually in 2024-2025).
- Recent Trading: Store and online sales in local currencies increased 10.6% between November 1 and December 1, 2025.
Below is the five-year financial ratio analysis for Inditex (FY2019-FY2023).
Profitability Analysis
| Financial Ratio | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 |
| Gross Margin | 57.8% | 57.0% | 57.1% | 55.8% | 55.9% |
| EBITDA Margin | 27.3% | 26.5% | 25.8% | 22.1% | 26.5% |
| EBIT Margin | 19.3% | 16.9% | 15.5% | 7.4% | 16.9% |
| Net Margin | 15.0% | 12.7% | 11.7% | 5.4% | 12.9% |
| Return on Equity (ROE) | 28.1% | 23.4% | 20.3% | 7.5% | 24.3% |
Key Insights:
- Strong Post-Pandemic Recovery: After the global lockdowns in 2020, profitability ratios improved annually, reaching record highs for Net Margin and ROE in 2023.
- Stable Gross Margin: Despite high inflation and supply chain pressures, Inditex maintained a gross margin above 57% through strong pricing power and supply chain efficiency.
Operating Efficiency & Liquidity
| Financial Ratio | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 |
| Inventory Days | 81 | 93 | 74 | 86 | 77 |
| Receivables Days | 9 | 10 | 10 | 11 | 11 |
| Current Ratio | 1.48 | 1.35 | 1.34 | 1.36 | 1.15 |
| Quick Ratio | 0.94 | 0.81 | 0.92 | 0.93 | 0.72 |
Key Insights:
- Agile Supply Chain: As a leader in fast fashion, Inditex maintains very low receivables days (mostly cash retail sales) and efficient inventory turnover, which further optimized in 2023.
- Robust Liquidity: The upward trend in the current ratio reflects a strong cash position, supporting capital expenditures and the special logistics expansion plan.
Capital Structure & Solvency
| Financial Ratio | FY2023 | FY2022 | FY2021 | FY2020 | FY2019 |
| Debt-to-Asset Ratio | 44.5% | 46.2% | 46.8% | 47.9% | 48.2% |
| Net Cash Position (M EUR) | 11,406 | 10,070 | 9,359 | 7,560 | 8,060 |
| Interest Coverage Ratio | 44.2 | 34.5 | 32.1 | 11.2 | 36.8 |
Key Insights:
- Net Cash Company: Inditex consistently maintains a Net Cash position, meaning its cash and equivalents far exceed its total debt (including lease liabilities), resulting in very low financial risk.
- Low Leverage: The debt-to-asset ratio has gradually declined, and the interest coverage ratio remains high, demonstrating excellent resilience against financial risks.
Summary:
Inditex has shown remarkable operational resilience over the past five years. From the 2020 low, it quickly rebounded to exceed pre-pandemic sales levels. By integrating its online and offline channels into an omni-channel model, it has optimized its overall profit structure. Between 2023 and 2024, the company maintained a steady dividend policy while keeping sufficient internal funds for automated logistics and store digitalization investments.
In the apparel retail industry, the Price-to-Earnings (P/E) ratio reflects market expectations regarding growth potential and operational stability. Inditex (Zara) typically commands a valuation that sits between traditional retailers and high-growth specialty players.
Below is the P/E analysis comparing Inditex with its global peers as of early 2026:
Global Apparel Retailers P/E Comparison
Unit: Times (Based on Forward P/E or Latest Market Data)
| Company | Key Brands | Forward P/E | Status |
| Inditex | Zara | 22x – 25x | Industry leader with the most stable profitability |
| Fast Retailing | Uniqlo | 35x – 45x | High growth expectations, driven by Asian expansion |
| H&M Group | H&M | 15x – 18x | Lower valuation; currently in a margin recovery phase |
| Gap Inc. | Old Navy/Gap | 12x – 15x | Traditional US retail with limited growth momentum |
| TJX Companies | TJ Maxx | 25x – 28x | Off-price model with strong recession-proof attributes |
| Lululemon | Lululemon | 28x – 32x | Growth brand; still commands a premium despite slowing pace |
Competitive Analysis Key Points
1. The Fast Retailing (Uniqlo) Premium
Fast Retailing consistently maintains a higher P/E than Inditex. This is largely due to market confidence in its scaling capabilities in China, Southeast Asia, and India. While Zara is viewed as reaching saturation in mature markets, Uniqlo is seen as having a higher “growth ceiling.”
2. Inditex’s “Quality Leader” Valuation
Inditex’s P/E of approximately 23x reflects investor appreciation for its high gross margins (58%+) and robust free cash flow. While its physical expansion has slowed, its “ultra-fast supply chain” minimizes inventory risk, granting it defensive qualities and a valuation premium over H&M and Gap.
3. H&M’s Valuation Recovery
H&M trades at a discount compared to Inditex because its margins were heavily impacted by supply chain costs and inventory build-up in recent years. Its current valuation suggests the market is still waiting for proof of successful long-term structural turnaround.
4. Impact of Emerging E-commerce (e.g., Shein)
Although players like Shein are not yet public, their growth pressures the low-end lines of Zara and H&M. This shift forces markets to favor brands with “premiumization” capabilities. Inditex’s strategic push toward higher-end Zara collections is a direct effort to protect its P/E multiple from being eroded by ultra-fast fashion competitors.
Summary:
Inditex’s P/E reflects a fair price for an industry benchmark characterized by high-quality earnings. Fast Retailing’s higher P/E represents a bet on future footprint growth, while H&M remains a value play contingent on margin improvement.
Source: https://www.inditex.com/itxcomweb/en/investors/financial-reports/annual-reports
Back to Inditex page